Forum Replies Created
- blogs wrote:John, you mention percentages of houses that are fully owned, or mortgaged over 10 years ago, but surely you would realise that these are not what will affect property prices. Just as people value there house value on properties recently sold and jumping up and down with joy, when they get sold down should this also devalue their properties? Just in the same way as a small proprtion of sales has recently 'increased' their values? Cant have it both ways….
Hm.. another way to read this is : 90% of the investors have no idea what they're doing. ( having only 1 investment property they obviously aren't earning their salary with it , which means they do it 'beside their own job'.
The 90% property investments are owned by amateur investors is very scary, especially because it's these people that are having a hard time now with mortgage interest rates resets and high oil prices and unemployment rising.Jon Chown wrote:Scamp says.
These are interesting times, especially when you think a lot of property investors have 20 (!!) properties or more, all NEGATIVELY geared of barely above 0According to the ABS of the approx 2million Investment properties in Australia, 90% are owned by people who have only one investment property and less than 1% of investors own in excess of 10 properties.
20.000 people with more than 10 properties. That's quite a lot if you ask me, especially if they get into financial trouble. And remember : 1000 houses collectively selling for 50% of the houseprices can bring down your houseprice to 50% also. All you need for the market to crash is a lack of buyers. Well.. if you look at todays market, there's not a lot of buyers out there. No more free equity due to the new ABS figures means that the freebooter investors are out of the game. That's 30% of the market. Then there's the pensionists who are in deep trouble also , that's another 10%. There's the average families with credit cards with deep financial trouble and extremely high oil prices, that's another 30%. Then there's the FHB's who can't get a 105% loan anymore from banks, that's the last 30%.
Where, if you would be so kind to tell us, will you get buyers from ?
No buyers = no sales = lower houseprices = still no sales = 30% houseprice crash = still no sales = 60% houseprice crash = yes.. the FHB's can buy again.Sydney houseprices have already dropped 35%, please give any good reason why other cities won't follow ?
( brisbane is down 20% btw.. I see you're in brisbane, you should know this ? )rates will rise by 0.5 percent this year, and keep going up , and up and up. There's 0% chance of them going down. Oil prices add to the pressure, as inflation is up up up, so interest must go up up up to 13% base rates minimum, which means 18% variable rates.
These are interesting times, especially when you think a lot of property investors have 20 (!!) properties or more, all NEGATIVELY geared of barely above 0 at their fixed low rates that will jump to 10% in september.
If those all come on the market, it's carnage like noone has seen before. 80% house price crashes , and houses abandoned because they are too expensive to upkeep.How much can you buy it for ?
What is the rent you will get ?
Did you check the LEP to see if the views will be affected ?
How much are the service costs of the flat ?
How big is it ?
What are the average sale prices and how much do you earn ?etc etc…
They are set to HALVE in the next 3-4 years. You will not miss out.
Join the bears at : http://www.globalhousepricecrash.com and educate yourself.You won't be sorry.
Xenia wrote:Our next investing network meeting will be about the Adelaide real estate market. Anyone who is interested is invited to come along and listen to the experts. Please email me [email protected] for details.From the website of adprop.com.au : AdProp Pty Ltd is definitely a licensed Real Estate agency
Aha… a real estate agency. "listen to the experts" certainly means : "listen to our spruikers" ?
Please, enlighten me, are you positive or negative about the Adelaide property market ? Also please state why. These 'sessions' aren't needed. For information about the Adelaide property market, just turn your TV on and switch to the news channel, or visit a local Adelaide foreclosure auction to see how 'well' the property market is doing
Well at least you do your best to study before you rush into something. That's good.
Foreclosures are held in auctions. Although at the moment, like someone said, there's no real gain to be had in foreclosure auctions yet. It's very , very bearish and in about 6 months you can get any house for 50% less than you'd pay in 2006-2007. The last auction of 9 houses, only 1 sold. 8 weren't even bid on. Banks will sell for whatever they can get very soon, especially when they get under liquidity pressure ( either by a law change or simply by other banks not lending them money because those too , are out of cash ).The first ripples are arriving in Australia now. Study now, go to some auctions to get a feel of what is going on ( lately auctions are going relatively fast, maybe 40 minutes for 10 homes, so it shouldn't be too boring ) and you will get a good feel of the market too. If you have a preapproval on a loan, you can even make a silly low bid just to get the feel ( you'll start blushing for sure the first time you bid, but with experience you will learn to see it as a normal buy ). For a house 'worth' 800.000, just bid 150.000 or something. Make sure you don't lift your arm when the auctioneer says something, just SAY the price "on hundred and fifty thousand" instead. Auctioneers usually just 'assume' bids, like 500.000 if you don't say anything. *IF* the auctioneer tries this on you ( it's a trick !! ) then make sure you shout out very very very loud that you didn't bid 500.000 but 150.000.
If you don't say anything on a wrong bid, you could get into trouble. So make sure you only bid on what you want to bid. When auctions get tougher, auctioneers will use trickery more. Also make sure you know the game. First time you go to an auction NEVER *EVER* bid. Just wait, watch, see and learn.
Make sure you understand how the prices go up. Usually there will be sudden increases which you need to be aware of , for instance ( this is only an example and not reality ! ):
between 50K and 100K increases will be 5K
when you get to 100K , the increases will be per 10K
when you get to 250K , the increases will be 25K.From a buyers perspective, it's a smart idea to be the one who bids on this 'border'. So make sure YOU are the one bidding 100K, because the next one won't be able to bid 105K , but will have to bid 5K more, to 110K.
Same for 250K. If you're bidding at 200K, stop bidding and let someone else ( a third party ) catch up so you can bid the 210K. This way you can make the 250K bid, and people will have to suddenly bid 275K.Some auctioneers will drop the increases again when people stop bidding, it all depends on the rules. So make sure you read the rulebook before you start bidding. Usually you will get a small A4 with rules on how to bid and the auctioneers name etc. Make sure you bring a dictionary the first time, or take notes of difficult words, like "box lot" , "the reserve" and "buy-back" "proxy bid" "collusion" ( illegal but very practical ) "premium" etc.
Make sure you understand what you're doing and what you will need to pay. Sometimes you need to pay a buyers fee ( premium ) , sometimes you won't, usually you will have to pay taxes etc.When you're ready to make your first bid, make sure that you have seen the house you bid on. Also make sure there are no Liens or "Junior Liens" on the house ( also second and third mortgages, but also tax outstanding etc ) as *YOU* will be buying those as well ! It's your responsibility to make sure you don't buy a debt. ( sounds silly doesn't it.. but it's true, you can "buy a debt" this way, a perfect way to lose a LOT of money very quickly ).
Some people will put a maximum on what they want to bid. They will start lower and start the bidding. That's a tactics that can be useful if you're there for only 1 house. Another tactics which I personally like much better is to have a list of houses ( preferably listed at the middle to end of an auction ) and just bid low bids on all of them ONCE. If you attend enough auctions, you're bound to get 1-2 real good deals this way. This assumes you are there really as an investor and don't buy with 'feeling' but are looking for a cheap bargain. Take houses that don't appeal to the public, don't go with the houses with nice little red flowers and the nicely cut grass for instance, as you will most probably have to bid up against people with 'feeling' who usually aren't looking for bargains but for a nice , clean house. These people will usually buy at or near 'market value' at higher risks, and usually come in pairs ( husband and wife ). You can recognize the investors because they look generally unmoved by the houses being sold, usually they wear casual clothes.
Also, auctions can be fun. The auctioneers usually are nice chaps who enjoy their fair bit of humor during the auction. And *NEVER* bid on the first house being sold unless you *really , really* want it. It's usually overpriced and will get the most bidders.
Good luck finding a good deal. Remember, it's better to bid LOW once on 6 houses, than to bid 6 times on the same house. Once you have seen a few auctions you will recognize the agents and the bank lawyers. It will make it easier to spot a 'seller bid' ( something you should NEVER bid against )
ItalianDragon wrote:Stay away, the bubble will burst really badly. Australians can`t keep paying 6 times their income for houses.It's actually immensely worse than that : it's 12 times their income.
And not at low interest rates either, it's an unbelieveable 9% interest.Italian : yes, it's unsustainable. Like I said a few months ago : This crash will dwarf 1929.
It's becoming more and more clear that investing in real-estate today is pushing people into hell.
I can only hope that this post came early enough to warn of even 1 prospective buyer. Then it would have been all worth it.
RVP wrote:I have alittle infooh please don't keep us waiting, c'mon spit it out.
Nucopia wrote:Remember that if you get unemployed, you still have to pay interest. hahahahaha I have not been employed for almost 10 years now and my property income has always surpassed the interest I pay. Its also left me with a nice level of accruing cash surplus. Funny rental increases are keeping pace with rate rises and demand for rental property is increasing all the time. Cashed up and ready to take advantage of the market mmmmmm make it on the up curve or the down it don’t matter With a loan to value ratio of less then 30 % and equity to borrow if and when I see the time is right and the opportunity arises. Im unemployed and loving it!they key here being "my property income has always surpassed the interest I pay".
I'm glad you're doing so well Nucopia, you're one of the first people who actually have a POSITIVE geared property investment. Actually, you're the second one that ever posted he had a positive geared investment instead of a negative geared one. It's good to hear at least someone did their maths.Unfortunately , for every positive geared, there are 500 negative geared ones. So until that is solved, we're still in for big trouble.
gmh454 :
Thanks for the update. It's nothing new to me, it's something that comes and goes. The last auction results are in , and there's a clearance rate of 11%. We're in a very special market nowadays :
We're in a buyer market, and there's no buyers.gmh, can you elaborate on what will happen to someone who is in the kind of trouble you stated ?
Will they strike a deal with the creditors , will they be blacklisted anywhere, will they be exempt from taxes ?ruk wrote:remember it's better to pay interest, than tax.Remember that if you get unemployed, you still have to pay interest.
why don't you put them up for sale thought a real estate agent ?
Never pull the pin. Just make a 'cheeky offer', let's say for a house asking price of 390.000, you offer 270.000.
Remember : House prices have gone up more than 2/3 in the last few years, it's only normal they come down 2/3 again to nominal values. At the moment, prices are expected to drop by 50%. If you want to invest into anything, you need to make sure you take this 50% drop in your offer. Doing a 270.000 offer actually is a pretty reasonable offer, being only 120.000 lower , instead of the 200.000 predicted drop in prices.
Don't go for smalltime 50K drops, just go cheeky and go 120.000 lower. The people that bought the house for 160.000 a few years ago will still make a nice 10.000 profit on the house.
The longer the seller waits, the less his property is worth. That, plus the stress involved.
Never pull the pin, always make a cheeky offer. If they laugh at you for being cheeky, just laugh back and think to yourself that houseprices are about to drop 50% in the near future and you'll be able to buy much more for your dollars later on in the crash.HAV11C wrote:Thanks for the info.Its not a scam he has repaid over 200k, If he was trying to rip me off I'd be chasing him for 250k not 45k
I'll do the search on veda.
Cheers
AndrewLike I said, it could be a ponzi scheme in which funds from investors are used to pay back funds from previous investors. As long as money keeps coming in, everyone wins. If they keep 40K from 100 people, that's a nice 4 million dollars , on which there now is a charge for the girlfriend ( the final step in the scam )
Ofcourse it could also be a completely legitimate thing. But then the question arises in why he won't pay you back. 45K doesn't sounds like a lot of money, but it certainly mounts up if he screws 100 people for 45K each.
RVP wrote:So again i ask can anyone give me some insight into finding forclosed homes please!
Ever heard of Google ? Today's kids want everything on a silver plate nowadays. "Help me get rich please" , "help me with my loan", "help me with my spelling errors".
My advice to you :
– Get a bit older before you even think about going into foreclosures
– Get some cash , by working a job , before you think about going into foreclosures
– Get a spelling checker or at least finish elementary school.
– Get a basic course in economics before you do anything with moneyBy that time, we'll be in the recession and you'll be glad you didn't get into more debt than you already are.
At least I'm glad you paid off your 20.000 debt. Although I have a hard time beleiving you really did , I think starting out with credit card debts or worse ( 34% ) really isn't a healthy grounds for giving you money.
Can I ask how much cash you have laying around in order to buy a foreclosed property ?.,.. I'd expect you to have at least 100.000$ if you're anywhere serious about buying property on a foreclosure auction ( damn… still helped you ).
I didn't mean to make you cry, I'm here to show you reality of life and wise money-spending. Getting debt to invest in something that you have not even the slightest idea about isn't something that I'd consider 'wise investing'. If you need help finding foreclosures, I'd say stay out of the big boys gamezone, and just rent a place and save money until you are ready to make your first baby-steps in investor-land.
a 'charge' over a company's assets is a bit like a mortgage. It basically makes a specific creditor a secured creditor, meaning they get first bite at the companies assets if the worst happens.
It's not uncommon for major suppliers or lenders to require this as a matter of course and its presence doesn't necessarily mean a company is in financial difficulty. However, it's also one of the first things a trade creditor who is owed money would be asking for as a condition of continued supply if they did feel their customer was in difficulty.
Judging from the story you just posted I think you should *REALLY* press your creditor to pay you now, before it's too late. Basically it's already too late.
Basically I think you have been ( or are about to be ) scammed. It's a common trick , a pyramid game or ponzi scheme in which investments into the company are used to pay current credits into the company. As long as money keeps coming into the company, every creditor gets paid. When the money stops, the bottom ponzischemers get screwed. The 'Charge' has probably been made by a company owned by the girlfriend of your scammer in order to get the last bit of money out of the company, since she will have top priority now on assets of the company. They will already be offloading assets now and soon declare bankruptcy.
Well.. that's my opinion anyway. Tip : Get your money before it's gone.
Just let it go on auction. The chance it sells is very, very small. And you will get a real value of the house this way.
Don't ever be pressed to buy, it's a real estate agent trick to get a buyer to commit to something that you don't really want to commit to.I'm amazed that people still worry about 'missing out'. This is a BUYER market now. If this property doesn't go to you, then there's 20 other properties, nicer and cheaper for you just around the corner. The fact that you are being pressed into a corner means that the seller wants you to commit. He *knows* he will get less on auction , and there's no other interested than you. Just let it go on auction and offer 100K less.
Trust me, if you don't buy this one, you can buy 1000's of other properties with the same features, and they get cheaper and cheaper every week. 2000 properties are being put up for sale every WEEK.. and none of them sell.
Don't allow the agent to press you, just offer 100K less than you're offering now. Say something like "The bank doesn't allow me to borrow more" or whatever. This way, you put the pressure on the seller instead of on you.
Buying your first PPOR is challenging enough without the pressure. Do not allow anyone to put you under pressure.
IF quick settlement is of more concern than the price, why doesn't the seller LOWER his price ? exactly.
He will lower his price, just offer 100K lessbardon wrote:Regulation isn't the answer, who told you that anyway ?Dont worry the central banks control Australia,If banks cant lend they will go out of business, do you think that is what Rudd wants, do you think he would be permitted to do that ?
I don't say banks can't lend. I say banks can't lend unrealistic amounts of money anymore. I just say the government is already placing more restrictions on banks and the limit of their lending.
The central banks don't control Australia. The only thing they control now is a big bubble of non-existant equity. When the bubble bursts, some banks will go bust, some will barely stand. The only reason your banks haven't been eaten up by the bigger Chinese / European or USA banks is because Rudd protects them from being taken over. In the world Economy, your banks mean nothing, they are smalltime players.
That being said, in Australia they do mean a lot, the 4 pillars system was meant to protect the country from collapse once the credit crisis reaches Australia, it it will. The whole credit crisis occurred because too high mortgages were given to people who could not pay them. On top of that, the banks themselves now can't use as much cash anymore, and thus are now limiting themselves in what they lend out.
I'm sure if you go to the bank now and ask for a mortgage, you won't get the same limit as you could get in 2007. Just go try it out. I don't even expect a confirmation since I *know* this to be true.
It's not coming, it's already here !
